Australian retail investors will have greater access to IPOs via an app launched today, its inventors claim.
OnMarket provides access to the same IPOs, with the same terms, as institutional investors its designers at OnMarket Bookbuilds say.
The gap between institutional and retail investors for IPOs is vast. According to Deloitte, there were 74 floats in 2014, and these raised a combined $26 billion in capital.
But retail investors only had access to a small slice of this, as big banks, financial institutions and their clients get a first look at most floats.
According to OnMarket Bookbuilds CEO Ben Bucknell, only 16% of 2014’s IPOs had allocations for retail investors.
“In the last five years, retail investors were excluded from $66 billion in placements and $20 billion in IPOs greater than $400 million. This means that most of the Australian population is missing out on the opportunity to invest in most IPOs and placements,” he said.
The app got an endorsement from prime minister Malcolm Turnbull, who attended the launch.
“The brilliance of this application is simply that it makes it easier to buy, to trade,” he said.
“It will open up the investment market considerably”
However, it might take a while for OnMarket to bridge the IPO gap. Since 2013 it has been used for $180 million in capital raisings in 12 transactions.